Tar Heel Tattler - April 2007

Did N.C. get hung up on call centers?

- Maggie Frank

Technology can be as fickle as the traditional industries it was recruited to replace. Take call centers, considered a successor to textiles and furniture for providing low-paying, low-skill jobs. The latest case in point: Cigna Corp., a Philadelphia-based health insurer, announced it will close its Charlotte call center in June, letting go 315 people.

Volume there, as in many call centers, has slackened, supplanted by Internet inquiries. It’s hard to get a handle on employment because many call-center jobs are counted with the industries they serve. But the figures the state has for contract call centers show jobs more than tripled from 1994 to 2000, when call centers were heavily recruited, peaked at 7,225 in 2001, bottomed out in 2004 and are only now creeping up to the level of six years ago. Employment was about 6,400 in the second quarter of last year.

When North Carolina industry hunters began recruiting call centers, they seemed like godsends. Most of the jobs required little education, making them good fits for laid-off factory workers. “Any time a community could get jobs, people were all too happy to get them,” says Nat Irvin II, head of Future Focus 2020, a Wake Forest University think tank.

North Carolina had — and has — a lot to offer, says John Boyd, president of The Boyd Co., a Princeton, N.J., site-selection consultant. Labor costs are low — compared with other states, if not other countries — and its anti-union laws keep them that way. Plus the state, unlike many others, doesn’t tax interstate phone service. But other forces are at work. “People are more comfortable doing things online, doing things themselves, and that is having an impact on certain segments of the industry.”

In Cigna’s case, it’s getting fewer calls because customers find answers to questions on the company’s Web site, spokesman Joe Mondy says. But there’s another twist: Several other companies have expressed interest in hiring at least half the workers Cigna will let go. They are trained to solve problems, he says, rather than to read from a script. In other words, they’re the kind of people most industries need.

Call-center workers must know more than they did 10 years ago and handle harder questions. They are better trained and often more educated. But that doesn’t necessarily translate into higher wages, Irvin says. “The technology sector has a way of keeping them low to stay competitive.”